One-Third of Entity List Companies Have Affiliates Captured by BIS 50% Rule, Firm Says
Open-source intelligence software firm WireScreen said it has identified more than 20,000 Chinese entities that are subject to U.S. export restrictions as a result of the Bureau of Industry and Security's 50% rule, released last month (see 2510030041 and 2509290017).
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Although WireScreen said there are about 1,300 China-related parties named on the actual Entity List, the firm has found thousands of additional Chinese subsidiaries or other entities indirectly and majority-owned by those Entity List parties. Under the BIS rule, those majority-owned subsidiaries and affiliates face the same export license requirements as the listed company that owns them.
Those unlisted companies include businesses in the defense, semiconductor, aerospace and dual-use technology sectors, as well as affiliates of organizations that were designated by BIS as Military End Users or that have military or intelligence ties. WireScreen said one-third of Entity List companies have at least one active subsidiary exceeding the 50% ownership threshold.
"The Affiliates Rule expansion increases the number of listed companies more than fifteenfold," it said, "significantly raising due diligence requirements for U.S. firms."